Each passing day of Washington DC news this week added an additional 10 years of wear and tear to our already downtrodden souls. Sheesh.
To summarize, President Trump directed the U.S. Trade Representative to identify $200 billion worth of Chinese goods for additional 10% tariffs; he also threatened an additional $200 billion. If this is all a big set up for some profound negotiation that America will “win,” well, generally speaking, you need the other side to return your calls. Apparently China isn’t doing that. Womp womp (speaking of “womp womp,” eff you Corey L.).
Still, U.S. chipmakers are cheering punitive measure against China. Why? Because they’re actively fighting a war with China over attempted intellectual property raids. See, e.g., Micron Technology Inc. ($MU).
According to Bill McBride, Merrill Lynch wrote:
The good news is that we are still many steps away from a full blown global trade war. The bad news is that the tail risks are rising and our work and the literature suggest a major global trade confrontation would likely push the US and the rest of the world to the brink of a recession. So far, the trade actions taken by the Trump White House and trading partners have been relatively modest and in turn have had a limited impact on the economy and financial markets. The next round of $100-$200bn of tariff between US and China may prove more substantial. Further escalation like auto tariffs would lead us to reassess the US economic outlook.
Yikes. Well, if auto stocks were any indication on Friday, that reassessment may be in order:..
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